☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 83-4364296 | |||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Each Class: | Trading Symbol(s) | Name of Each Exchange on Which Registered: | ||||||||||||
Large accelerated filer | ☑ | Accelerated filer | ☐ | |||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||||||||
Emerging growth company | ☐ | |||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
Page | |||||||||||
PART I — FINANCIAL INFORMATION | |||||||||||
ITEM 1. | Condensed Consolidated Financial Statements (unaudited) | ||||||||||
ITEM 2. | |||||||||||
PART II — OTHER INFORMATION | |||||||||||
ITEM 1. | |||||||||||
ITEM 1A. | |||||||||||
ITEM 6. | |||||||||||
2003 LTIP | Mylan N.V. Amended and Restated 2003 Long-Term Incentive Plan | ||||
2021 Form 10-K | Viatris’ annual report on Form 10-K for the fiscal year ended December 31, 2021, as amended | ||||
Adjusted EBITDA | Non-GAAP financial measure that the Company believes is appropriate to provide information to investors - EBITDA (defined below) is further adjusted for share-based compensation expense, litigation settlements, and other contingencies, net, restructuring and other special items | ||||
ANDA | Abbreviated New Drug Application | ||||
AOCE | Accumulated other comprehensive earnings | ||||
APIs | Active pharmaceutical ingredients | ||||
ARV | Antiretroviral medicines | ||||
ASC | Accounting Standards Codification | ||||
ASU | Accounting Standards Update | ||||
Biocon | Biocon Limited | ||||
Biocon Biologics | Biocon Biologics Limited, a majority owned subsidiary of Biocon | ||||
Biocon Biologics Transaction | The pending transaction between Viatris and Biocon Biologics pursuant to which Viatris will contribute its biosimilars portfolio to Biocon Biologics | ||||
Biocon Agreement | The transaction agreement between Viatris and Biocon Biologics, dated February 27, 2022, relating to the Biocon Biologics Transaction | ||||
Biogen | Biogen MA Inc. and Biogen International GmbH, collectively | ||||
Business Combination Agreement | Business Combination Agreement, dated as of July 29, 2019, as amended from time to time, among Viatris, Mylan, Pfizer and certain of their affiliates | ||||
CAT | Competition Appeals Tribunal | ||||
CJEU | European Court of Justice | ||||
clean energy investments | Used to define the three equity method investments the Company has in limited liability companies that own refined coal production plants whose activities qualify for income tax credits under Section 45 of the Code | ||||
CMA | Competition and Markets Authority | ||||
Code | The U.S. Internal Revenue Code of 1986, as amended | ||||
Combination | Refers to Mylan combining with Pfizer's Upjohn Business in a Reverse Morris Trust transaction to form Viatris on November 16, 2020 | ||||
Commercial Paper Program | The $1.65 billion unsecured commercial paper program entered into as of November 16, 2020 by Viatris, as issuer, Mylan Inc., Utah Acquisition Sub Inc. and Mylan II B.V., as guarantors, and certain dealers from time to time | ||||
Commission | European Commission | ||||
COVID-19 | Novel coronavirus disease of 2019 | ||||
CP Notes | Unsecured, short-term commercial paper notes issued pursuant to the Commercial Paper Program | ||||
DCGI | Drug Controller General of India |
Developed Markets segment | Viatris’ business segment that includes our operations primarily in the following markets: North America and Europe | ||||
Distribution | Pfizer's distribution to Pfizer stockholders all the issued and outstanding shares of Upjohn Inc. | ||||
DOJ | U.S. Department of Justice | ||||
DRIP | Dividend Reinvestment and Share Purchase Plan | ||||
EBITDA | Non-GAAP financial measure that the Company believes is appropriate to provide information to investors - U.S. GAAP net earnings (loss) adjusted for net contribution attributable to equity method investments, income tax provision (benefit), interest expense and depreciation and amortization | ||||
EDPA | U.S. District Court for the Eastern District of Pennsylvania | ||||
Emerging Markets segment | Viatris’ business segment that includes, but is not limited to, our operations primarily in the following markets: Parts of Asia, the Middle East, South and Central America, Africa, and Eastern Europe | ||||
ERP system | Enterprise resource planning system | ||||
EU | European Union | ||||
Exchange Act | Securities Exchange Act of 1934, as amended | ||||
FASB | Financial Accounting Standards Board | ||||
FCA | Financial Conduct Authority in the U.K. | ||||
FDA | U.S. Food and Drug Administration | ||||
Form 10-Q | This quarterly report on Form 10-Q for the quarterly period ended March 31, 2022 | ||||
Greater China segment | Viatris’ business segment that includes our operations primarily in the following markets: China, Taiwan and Hong Kong | ||||
Gx | Generic drugs | ||||
IPR | Inter Partes review | ||||
IRS | U.S. Internal Revenue Service | ||||
IRS Ruling | The private letter ruling issued by the IRS to Pfizer with respect to the Combination, dated as of March 17, 2020 | ||||
IT | Information technology | ||||
JANZ segment | Viatris’ business segment that includes our operations in the following markets: Japan, Australia and New Zealand | ||||
LIBOR | London Interbank Offered Rate | ||||
Lilly | Eli Lilly and Company | ||||
maximum leverage ratio | The maximum consolidated leverage ratio financial covenant requiring maintenance of a maximum ratio of consolidated total indebtedness as of the end of any quarter to consolidated EBITDA for the trailing four quarters as defined in the related credit agreements from time to time | ||||
MDL | Multidistrict litigation | ||||
MPI | Mylan Pharmaceuticals Inc. | ||||
Mylan | Mylan N.V. and its subsidiaries | ||||
Mylan II | Mylan II B.V., a company incorporated under the laws of the Netherlands and an indirect wholly owned subsidiary of Viatris, in which legacy Mylan merged with and into | ||||
Mylan Inc. Euro Notes | The 2.125% Senior Notes due 2025 issued by Mylan Inc., which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan II B.V., Viatris Inc. and Utah Acquisition Sub Inc. |
Mylan Inc. U.S. Dollar Notes | The 4.200% Senior Notes due 2023, 3.125% Senior Notes due 2023, 4.550% Senior Notes due 2028, 5.400% Senior Notes due 2043 and 5.200% Senior Notes due 2048 issued by Mylan Inc., which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan II B.V., Viatris Inc. and Utah Acquisition Sub Inc. | ||||
Mylan Securitization | Mylan Securitization LLC | ||||
NASDAQ | The NASDAQ Stock Market | ||||
NDA | New drug application | ||||
NHS | National Health Services | ||||
Note Securitization Facility | The note securitization facility entered into in July 2021 for borrowings up to $200 million and expiring in August 2022 | ||||
OTC | Over-the-counter | ||||
Pfizer | Pfizer Inc. | ||||
Plan | Viatris Inc. 2020 Stock Incentive Plan | ||||
PMS | Pharmascience Inc. | ||||
PSUs | Performance awards | ||||
PTAB | U.S. Patent Trial and Appeal Board | ||||
R&D | Research and development | ||||
Receivables Facility | The $400 million accounts receivable entered into in August 2020 and expiring in April 2025 | ||||
Registered Upjohn Notes | The 1.125% Senior Notes due 2022, 1.650% Senior Notes due 2025, 2.300% Senior Notes due 2027, 2.700% Senior Notes due 2030, 3.850% Senior Notes due 2040 and 4.000% Senior Notes due 2050 originally issued on October 29, 2021 registered with the SEC in exchange for the corresponding Unregistered Upjohn U.S. Dollar Notes in a similar aggregate principal amount and with terms substantially identical to the corresponding Unregistered Upjohn U.S. Dollar Notes and fully and unconditionally guaranteed by Mylan Inc., Mylan II and Utah Acquisition Sub Inc. | ||||
respiratory delivery platform | Pfizer’s proprietary dry powder inhaler delivery platform | ||||
restricted stock awards | The Company’s nonvested restricted stock and restricted stock unit awards, including PSUs | ||||
Revolving Facility | The $4.0 billion revolving facility dated as of July 1, 2021, by and among Viatris, certain lenders and issuing banks from time to time party thereto and Bank of America, N.A., as administrative agent | ||||
RICO | Racketeer Influenced and Corrupt Organizations Act | ||||
RSUs | The Company's unvested restricted stock unit awards | ||||
Sanofi | Sanofi-Aventis U.S., LLC | ||||
SARs | Stock Appreciation Rights | ||||
SDNY | U.S. District Court for the Southern District of New York | ||||
SEC | U.S. Securities and Exchange Commission | ||||
Securities Act | Securities Act of 1933, as amended | ||||
Senior U.S. Dollar Notes | The Upjohn U.S. Dollar Notes, the Utah U.S. Dollar Notes and the Mylan Inc. U.S. Dollar Notes, collectively | ||||
Separation | Pfizer's transfer to Upjohn of substantially all the assets and liabilities comprising the Upjohn Business | ||||
Separation and Distribution Agreement | Separation and Distribution Agreement between Viatris and Pfizer, dated as of July 29, 2019, as amended from time to time | ||||
SG&A | Selling, general and administrative expenses |
SOFR | Secured overnight financial rate | ||||
Stock awards | Stock options and SARs | ||||
Teva | Teva Pharmaceutical Industries Ltd. | ||||
TSA | Transition service agreements | ||||
U.K. | United Kingdom | ||||
U.S. | United States | ||||
U.S. GAAP | Accounting principles generally accepted in the U.S. | ||||
Unregistered Upjohn U.S. Dollar Notes | The 1.125% Senior Notes due 2022, 1.650% Senior Notes due 2025, 2.300% Senior Notes due 2027, 2.700% Senior Notes due 2030, 3.850% Senior Notes due 2040 and 4.000% Senior Notes due 2050 originally issued on June 22, 2020 by Upjohn Inc. (now Viatris Inc.) in a private offering exempt from the registration requirements of the Securities Act and fully and unconditionally guaranteed by Mylan Inc., Mylan II and Utah Acquisition Sub Inc. | ||||
Upjohn | Upjohn Inc., a wholly owned subsidiary of Pfizer prior to the Distribution, that combined with Mylan and was renamed Viatris Inc. | ||||
Upjohn Business | Pfizer’s off-patent branded and generic established medicines business that, in connection with the Combination, was separated from Pfizer and combined with Mylan to form Viatris | ||||
Upjohn U.S. Dollar Notes | Senior unsecured notes denominated in U.S. dollars and originally issued by Upjohn Inc. or Viatris Inc. pursuant to an indenture dated June 22, 2020 and fully and unconditionally guaranteed by Mylan Inc., Mylan II B.V. and Utah Acquisition Sub Inc. | ||||
Utah Acquisition Sub | Utah Acquisition Sub Inc., a Delaware corporation and an indirect wholly owned subsidiary of Viatris | ||||
Utah Euro Notes | The 2.250% Senior Notes due 2024 and 3.125% Senior Notes due 2028 issued by Utah Acquisition Sub Inc., which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan Inc., Viatris Inc. and Mylan II B.V. | ||||
Utah U.S. Dollar Notes | The 3.950% Senior Notes due 2026 and 5.250% Senior Notes due 2046 issued by Utah Acquisition Sub Inc., which are fully and unconditionally guaranteed on a senior unsecured basis by Mylan Inc., Viatris Inc. and Mylan II B.V. | ||||
Viatris | Viatris Inc., formerly known as Upjohn Inc. prior to the completion of the Combination | ||||
YEN Term Loan Facility | The ¥40 billion term loan agreement dated as of July 1, 2021, by and among Viatris, Mizuho Bank, Ltd. and MUFG Bank, Ltd., as administrative agent |
(actual dollars and shares) | Three Months Ended March 29, 2020 | Period From February 14, 2019 (Date of Incorporation) to March 31, 2019 | ||||||
Revenues | $ | — | $ | — | ||||
Operating expenses | — | — | ||||||
Other (income)/deductions—net | — | — | ||||||
Income before provision/(benefit) for taxes on income | — | — | ||||||
Provision/(benefit) for taxes on income | — | — | ||||||
Net income | $ | — | $ | — | ||||
Earnings per common share—basic | $ | — | $ | — | ||||
Weighted-average common shares—basic | 100 | 100 | ||||||
Three Months Ended | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Net sales | $ | 4,178.2 | $ | 4,400.1 | |||||||||||||||||||
Other revenues | 13.5 | 30.2 | |||||||||||||||||||||
Total revenues | 4,191.7 | 4,430.3 | |||||||||||||||||||||
Cost of sales | 2,420.5 | 3,303.0 | |||||||||||||||||||||
Gross profit | 1,771.2 | 1,127.3 | |||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Research and development | 142.3�� | 184.1 | |||||||||||||||||||||
Selling, general and administrative | 915.3 | 1,186.5 | |||||||||||||||||||||
Litigation settlements and other contingencies, net | 6.2 | 22.9 | |||||||||||||||||||||
Total operating expenses | 1,063.8 | 1,393.5 | |||||||||||||||||||||
Earnings (loss) from operations | 707.4 | (266.2) | |||||||||||||||||||||
Interest expense | 146.2 | 169.0 | |||||||||||||||||||||
Other expense, net | 33.7 | 6.1 | |||||||||||||||||||||
Earnings (loss) before income taxes | 527.5 | (441.3) | |||||||||||||||||||||
Income tax provision | 128.3 | 596.3 | |||||||||||||||||||||
Net earnings (loss) | $ | 399.2 | $ | (1,037.6) | |||||||||||||||||||
Earnings (loss) per share attributable to Viatris Inc. shareholders | |||||||||||||||||||||||
Basic | $ | 0.33 | $ | (0.86) | |||||||||||||||||||
Diluted | $ | 0.33 | $ | (0.86) | |||||||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | 1,210.5 | 1,207.5 | |||||||||||||||||||||
Diluted | 1,213.1 | 1,207.5 |
Three Months Ended | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Net earnings (loss) | $ | 399.2 | $ | (1,037.6) | |||||||||||||||||||
Other comprehensive loss, before tax: | |||||||||||||||||||||||
Foreign currency translation adjustment | (469.2) | (721.2) | |||||||||||||||||||||
Change in unrecognized (loss) gain and prior service cost related to defined benefit plans | (2.6) | 0.8 | |||||||||||||||||||||
Net unrecognized gain on derivatives in cash flow hedging relationships | 0.2 | 3.3 | |||||||||||||||||||||
Net unrecognized gain on derivatives in net investment hedging relationships | 201.3 | 227.4 | |||||||||||||||||||||
Net unrealized loss on marketable securities | (1.7) | (0.9) | |||||||||||||||||||||
Other comprehensive loss, before tax | (272.0) | (490.6) | |||||||||||||||||||||
Income tax provision | 44.7 | 37.0 | |||||||||||||||||||||
Other comprehensive loss, net of tax | (316.7) | (527.6) | |||||||||||||||||||||
Comprehensive earnings (loss) | $ | 82.5 | $ | (1,565.2) |
March 31, 2022 | December 31, 2021 | ||||||||||
ASSETS | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 752.4 | $ | 701.2 | |||||||
Accounts receivable, net | 4,093.9 | 4,266.4 | |||||||||
Inventories | 3,797.3 | 3,977.7 | |||||||||
Prepaid expenses and other current assets | 1,763.6 | 1,957.6 | |||||||||
Assets held for sale | 1,337.1 | — | |||||||||
Total current assets | 11,744.3 | 10,902.9 | |||||||||
Property, plant and equipment, net | 3,150.2 | 3,188.6 | |||||||||
Intangible assets, net | 25,251.8 | 26,134.2 | |||||||||
Goodwill | 10,978.8 | 12,113.7 | |||||||||
Deferred income tax benefit | 1,285.8 | 1,332.7 | |||||||||
Other assets | 1,056.0 | 1,170.7 | |||||||||
Total assets | $ | 53,466.9 | $ | 54,842.8 | |||||||
LIABILITIES AND EQUITY | |||||||||||
Liabilities | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 1,499.6 | $ | 1,657.4 | |||||||
Short-term borrowings | 655.4 | 1,493.0 | |||||||||
Income taxes payable | 177.8 | 236.9 | |||||||||
Current portion of long-term debt and other long-term obligations | 2,606.1 | 1,877.5 | |||||||||
Liabilities held for sale | 277.7 | — | |||||||||
Other current liabilities | 4,426.3 | 4,619.6 | |||||||||
Total current liabilities | 9,642.9 | 9,884.4 | |||||||||
Long-term debt | 18,762.5 | 19,717.1 | |||||||||
Deferred income tax liability | 2,729.5 | 2,815.0 | |||||||||
Other long-term obligations | 1,884.3 | 1,933.6 | |||||||||
Total liabilities | 33,019.2 | 34,350.1 | |||||||||
Equity | |||||||||||
Viatris Inc. shareholders’ equity | |||||||||||
Common stock: $0.01 par value, 3,000,000,000 shares authorized; shares issued and outstanding: 1,212,323,483 and 1,209,507,463, respectively | 12.1 | 12.1 | |||||||||
Additional paid-in capital | 18,555.1 | 18,536.1 | |||||||||
Retained earnings | 3,941.5 | 3,688.8 | |||||||||
Accumulated other comprehensive loss | (2,061.0) | (1,744.3) | |||||||||
Total equity | 20,447.7 | 20,492.7 | |||||||||
Total liabilities and equity | $ | 53,466.9 | $ | 54,842.8 |
Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Cost | Shares | Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | 1,209,507,463 | $ | 12.1 | $ | 18,536.1 | $ | 3,688.8 | — | $ | — | $ | (1,744.3) | $ | 20,492.7 | |||||||||||||||||||||||||||||||||||||||
Net earnings | — | — | — | 399.2 | — | — | — | 399.2 | |||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | — | — | (316.7) | (316.7) | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock and stock options exercised, net | 2,816,020 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Taxes related to the net share settlement of equity awards | — | — | (9.3) | — | — | — | — | (9.3) | |||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | 28.3 | — | — | — | — | 28.3 | |||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared, $0.12 per common share | — | — | — | (146.5) | — | — | — | (146.5) | |||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | 1,212,323,483 | $ | 12.1 | $ | 18,555.1 | $ | 3,941.5 | — | $ | — | $ | (2,061.0) | $ | 20,447.7 |
Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Cost | Shares | Cost | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | 1,206,895,644 | $ | 12.1 | $ | 18,438.8 | $ | 5,361.2 | — | $ | — | $ | (858.0) | $ | 22,954.1 | |||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | (1,037.6) | — | — | — | (1,037.6) | |||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | — | — | (527.6) | (527.6) | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock and stock options exercised, net | 1,635,326 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Taxes related to the net share settlement of equity awards | — | — | (6.9) | — | — | — | — | (6.9) | |||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | — | 32.7 | — | — | — | — | 32.7 | |||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021 | 1,208,530,970 | $ | 12.1 | $ | 18,464.6 | $ | 4,323.6 | — | $ | — | $ | (1,385.6) | $ | 21,414.7 |
Three Months Ended | |||||||||||
March 31, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net earnings (loss) | $ | 399.2 | $ | (1,037.6) | |||||||
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 736.0 | 1,422.5 | |||||||||
Share-based compensation expense | 28.3 | 32.7 | |||||||||
Deferred income tax (benefit) expense | (52.8) | 288.4 | |||||||||
Loss from equity method investments | (0.1) | 17.9 | |||||||||
Other non-cash items | 37.8 | 33.3 | |||||||||
Litigation settlements and other contingencies, net | 5.2 | 22.9 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | (115.5) | (59.8) | |||||||||
Inventories | (69.1) | (203.4) | |||||||||
Accounts payable | (30.2) | 191.9 | |||||||||
Income taxes | 67.0 | 494.6 | |||||||||
Other operating assets and liabilities, net | 132.7 | (354.6) | |||||||||
Net cash provided by operating activities | 1,138.5 | 848.8 | |||||||||
Cash flows from investing activities: | |||||||||||
Cash received from acquisitions | — | 277.0 | |||||||||
Capital expenditures | (64.5) | (49.5) | |||||||||
Purchase of marketable securities | (8.6) | (12.3) | |||||||||
Proceeds from the sale of marketable securities | 8.5 | 12.3 | |||||||||
Payments for product rights and other, net | (7.4) | (3.7) | |||||||||
Proceeds from the sale of assets | 5.1 | 12.5 | |||||||||
Net cash (used in) provided by investing activities | (66.9) | 236.3 | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of long-term debt | 0.1 | — | |||||||||
Payments of long-term debt | (0.1) | — | |||||||||
Change in short-term borrowings, net | (837.9) | (1,063.9) | |||||||||
Taxes paid related to net share settlement of equity awards | (9.9) | (7.8) | |||||||||
Contingent consideration payments | (15.5) | (26.0) | |||||||||
Payments of financing fees | (0.4) | — | |||||||||
Cash dividends paid | (145.1) | — | |||||||||
Other items, net | (0.2) | (2.1) | |||||||||
Net cash used in financing activities | (1,009.0) | (1,099.8) | |||||||||
Effect on cash of changes in exchange rates | (11.4) | (22.2) | |||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 51.2 | (36.9) | |||||||||
Cash, cash equivalents and restricted cash — beginning of period | 706.2 | 850.0 | |||||||||
Cash, cash equivalents and restricted cash — end of period | $ | 757.4 | $ | 813.1 |
(In millions) | Three Months Ended March 31, 2022 | ||||||||||||||||||||||||||||
Product Category | Developed Markets | Greater China | JANZ | Emerging Markets | Total | ||||||||||||||||||||||||
Brands | $ | 1,298.7 | $ | 569.7 | $ | 249.0 | $ | 436.7 | $ | 2,554.1 | |||||||||||||||||||
Complex Gx and Biosimilars | 364.1 | — | 10.3 | 16.4 | 390.8 | ||||||||||||||||||||||||
Generics | 813.3 | 3.4 | 164.5 | 252.1 | 1,233.3 | ||||||||||||||||||||||||
Total | $ | 2,476.1 | $ | 573.1 | $ | 423.8 | $ | 705.2 | $ | 4,178.2 |
(In millions) | Three Months Ended March 31, 2021 | ||||||||||||||||||||||||||||
Product Category | Developed Markets | Greater China | JANZ | Emerging Markets | Total | ||||||||||||||||||||||||
Brands | $ | 1,403.7 | $ | 590.9 | $ | 284.0 | $ | 446.0 | $ | 2,724.6 | |||||||||||||||||||
Complex Gx and Biosimilars | 312.0 | — | 8.9 | 8.0 | 328.9 | ||||||||||||||||||||||||
Generics | 855.9 | 1.0 | 189.0 | 300.7 | 1,346.6 | ||||||||||||||||||||||||
Total | $ | 2,571.6 | $ | 591.9 | $ | 481.9 | $ | 754.7 | $ | 4,400.1 |
Three months ended March 31, | ||||||||||||||
(In millions) | 2022 | 2021 | ||||||||||||
Select Key Global Products | ||||||||||||||
Lipitor ® | $ | 440.1 | $ | 464.6 | ||||||||||
Norvasc ® | 207.8 | 227.7 | ||||||||||||
Lyrica ® | 171.7 | 187.8 | ||||||||||||
Viagra ® | 129.8 | 139.6 | ||||||||||||
EpiPen® Auto-Injectors | 88.8 | 103.7 | ||||||||||||
Celebrex ® | 85.2 | 89.0 | ||||||||||||
Effexor ® | 77.5 | 76.6 | ||||||||||||
Creon ® | 74.7 | 69.9 | ||||||||||||
Zoloft ® | 73.1 | 76.6 | ||||||||||||
Xalabrands | 53.0 | 57.9 | ||||||||||||
Select Key Segment Products | ||||||||||||||
Dymista ® | $ | 44.0 | $ | 40.3 | ||||||||||
Yupelri ® | 43.7 | 36.9 | ||||||||||||
Amitiza ® | 41.8 | 45.9 | ||||||||||||
Xanax ® | 40.0 | 45.1 |
Three Months Ended | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
(In millions) | 2022 | 2021 | |||||||||||||||||||||
Gross sales | $ | 7,198.3 | $ | 7,567.0 | |||||||||||||||||||
Gross to net adjustments: | |||||||||||||||||||||||
Chargebacks | (1,584.2) | (1,318.0) | |||||||||||||||||||||
Rebates, promotional programs and other sales allowances | (1,205.9) | (1,568.5) | |||||||||||||||||||||
Returns | (82.6) | (113.0) | |||||||||||||||||||||
Governmental rebate programs | (147.4) | (167.4) | |||||||||||||||||||||
Total gross to net adjustments | $ | (3,020.1) | $ | (3,166.9) | |||||||||||||||||||
Net sales | $ | 4,178.2 | $ | 4,400.1 |
(In millions) | March 31, 2022 | December 31, 2021 | |||||||||
Accounts receivable, net | $ | 1,707.1 | $ | 1,688.6 | |||||||
Other current liabilities | 1,095.8 | 1,362.1 | |||||||||
Total | $ | 2,802.9 | $ | 3,050.7 |
(In millions) | March 31, 2022 | December 31, 2021 | |||||||||
Trade receivables, net | $ | 3,556.9 | $ | 3,774.4 | |||||||
Other receivables | 537.0 | 492.0 | |||||||||
Accounts receivable, net | $ | 4,093.9 | $ | 4,266.4 |
Number of Shares Under Stock Awards | Weighted Average Exercise Price per Share | ||||||||||
Outstanding at December 31, 2021 | 5,576,490 | $ | 37.19 | ||||||||
Forfeited | (450,161) | $ | 27.54 | ||||||||
Outstanding at March 31, 2022 | 5,126,329 | $ | 38.04 | ||||||||
Vested and expected to vest at March 31, 2022 | 5,077,897 | $ | 38.21 | ||||||||
Exercisable at March 31, 2022 | 4,831,333 | $ | 39.19 |
Number of Restricted Stock Awards | Weighted Average Grant-Date Fair Value Per Share | ||||||||||
Nonvested at December 31, 2021 | 16,858,128 | $ | 15.12 | ||||||||
Granted | 16,635,392 | 10.20 | |||||||||
Released | (3,517,219) | 17.95 | |||||||||
Forfeited | (229,241) | 13.99 | |||||||||
Nonvested at March 31, 2022 | 29,747,060 | $ | 12.04 |
Pension and Other Postretirement Benefits | |||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
(In millions) | 2022 | 2021 | |||||||||||||||||||||
Service cost | $ | 9.5 | $ | 10.8 | |||||||||||||||||||
Interest cost | 10.4 | 8.5 | |||||||||||||||||||||
Expected return on plan assets | (16.6) | (16.5) | |||||||||||||||||||||
Amortization of prior service costs | 0.1 | (0.1) | |||||||||||||||||||||
Recognized net actuarial losses | — | 0.3 | |||||||||||||||||||||
Net periodic benefit cost | $ | 3.4 | $ | 3.0 |
(In millions) | March 31, 2022 | December 31, 2021 | March 31, 2021 | ||||||||||||||
Cash and cash equivalents | $ | 752.4 | $ | 701.2 | $ | 806.9 | |||||||||||
Restricted cash, included in prepaid expenses and other current assets | 5.0 | 5.0 | 6.2 | ||||||||||||||
Cash, cash equivalents and restricted cash | $ | 757.4 | $ | 706.2 | $ | 813.1 |
(In millions) | March 31, 2022 | December 31, 2021 | |||||||||
Raw materials | $ | 868.1 | $ | 922.4 | |||||||
Work in process | 767.5 | 993.3 | |||||||||
Finished goods | 2,161.7 | 2,062.0 | |||||||||
Inventories | $ | 3,797.3 | $ | 3,977.7 |
(In millions) | March 31, 2022 | December 31, 2021 | |||||||||
Prepaid expenses | $ | 268.1 | $ | 256.7 | |||||||
Available-for-sale fixed income securities | 36.6 | 38.2 | |||||||||
Fair value of financial instruments | 202.8 | 144.6 | |||||||||
Equity securities | 48.0 | 51.0 | |||||||||
Other current assets | 1,208.1 | 1,467.1 | |||||||||
Prepaid expenses and other current assets | $ | 1,763.6 | $ | 1,957.6 |
(In millions) | March 31, 2022 | December 31, 2021 | |||||||||
Machinery and equipment | $ | 2,845.8 | $ | 3,054.0 | |||||||
Buildings and improvements | 1,578.4 | 1,808.5 | |||||||||
Construction in progress | 541.8 | 588.7 | |||||||||
Land and improvements | 126.5 | 137.9 | |||||||||
Gross property, plant and equipment | 5,092.5 | 5,589.1 | |||||||||
Accumulated depreciation | 1,942.3 | 2,400.5 | |||||||||
Property, plant and equipment, net | $ | 3,150.2 | $ | 3,188.6 |
(In millions) | March 31, 2022 | December 31, 2021 | |||||||||
Operating lease right-of-use assets | $ | 281.7 | $ | 290.8 | |||||||
Other long-term assets | 774.3 | 879.9 | |||||||||
Other assets | $ | 1,056.0 | $ | 1,170.7 |
(In millions) | March 31, 2022 | December 31, 2021 | |||||||||
Trade accounts payable | $ | 928.4 | $ | 1,056.1 | |||||||
Other payables | 571.2 | 601.3 | |||||||||
Accounts payable | $ | 1,499.6 | $ | 1,657.4 |
(In millions) | March 31, 2022 | December 31, 2021 | |||||||||
Accrued sales allowances | $ | 1,095.8 | $ | 1,362.1 | |||||||
Legal and professional accruals, including litigation accruals | 694.9 | 715.6 | |||||||||
Payroll and employee benefit liabilities | 567.1 | 741.9 | |||||||||
Contingent consideration | 86.2 | 66.7 | |||||||||
Accrued restructuring | 171.8 | 233.5 | |||||||||
Accrued interest | 228.8 | 86.6 | |||||||||
Equity method investments, clean energy investments | 4.3 | 10.9 | |||||||||
Fair value of financial instruments | 98.9 | 61.0 | |||||||||
Operating lease liability | 89.9 | 86.7 | |||||||||
Other | 1,388.6 | 1,254.6 | |||||||||
Other current liabilities | $ | 4,426.3 | $ | 4,619.6 |
(In millions) | March 31, 2022 | December 31, 2021 | |||||||||
Employee benefit liabilities | $ | 861.3 | $ | 876.4 | |||||||
Contingent consideration | 112.2 | 133.0 | |||||||||
Tax related items, including contingencies | 429.5 | 426.1 | |||||||||
Operating lease liability | 191.7 | 200.9 | |||||||||
Accrued restructuring | 51.4 | 64.3 | |||||||||
Other | 238.2 | 232.9 | |||||||||
Other long-term obligations | $ | 1,884.3 | $ | 1,933.6 |
As of | ||||||||
( | March 31, 2022 | |||||||
Assets held for sale | ||||||||
Accounts receivable, net | $ | 136.1 | ||||||
Inventories | 122.4 | |||||||
Prepaid expenses and other current assets | 12.5 | |||||||
Intangible assets, net | 7.5 | |||||||
Goodwill | 953.0 | |||||||
Other assets | 105.6 | |||||||
Total assets held for sale | $ | 1,337.1 | ||||||
Liabilities held for sale | ||||||||
Accounts payable | $ | 95.4 | ||||||
Other current liabilities | 182.3 | |||||||
Total liabilities held for sale | $ | 277.7 |
Three Months Ended | ||||||||||||||||||||||||
(In millions) | March 31, | 2021 | ||||||||||||||||||||||
Total revenues | $ | 109.5 | ||||||||||||||||||||||
Operating and non-operating expense | 4.9 | |||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
(In millions, except per share amounts) | 2022 | 2021 | |||||||||||||||||||||
Basic earnings (loss) attributable to Viatris Inc. common shareholders | |||||||||||||||||||||||
Net earnings (loss) attributable to Viatris Inc. common shareholders | $ | 399.2 | $ | (1,037.6) | |||||||||||||||||||
Shares (denominator): | |||||||||||||||||||||||
Weighted average shares outstanding | 1,210.5 | 1,207.5 | |||||||||||||||||||||
Basic earnings (loss) per share attributable to Viatris Inc. shareholders | $ | 0.33 | $ | (0.86) | |||||||||||||||||||
Diluted earnings (loss) attributable to Viatris Inc. common shareholders | |||||||||||||||||||||||
Net earnings (loss) attributable to Viatris Inc. common shareholders | $ | 399.2 | $ | (1,037.6) | |||||||||||||||||||
Shares (denominator): | |||||||||||||||||||||||
Weighted average shares outstanding | 1,210.5 | 1,207.5 | |||||||||||||||||||||
Share-based awards | 2.6 | — | |||||||||||||||||||||
Total dilutive shares outstanding | 1,213.1 | 1,207.5 | |||||||||||||||||||||
Diluted earnings (loss) per share attributable to Viatris Inc. shareholders | $ | 0.33 | $ | (0.86) |
(actual dollars and shares) | As of March 29, 2020 | As of December 31, 2019 | ||||||
(Unaudited) | ||||||||
Assets | ||||||||
Total current assets | $ | — | $ | — | ||||
Total assets | $ | — | $ | — | ||||
Liabilities and Equity | ||||||||
Total current liabilities | $ | — | $ | — | ||||
Total liabilities | — | — | ||||||
Commitments and Contingencies | ||||||||
Common stock, $0.01 par value; 1,000 shares authorized; issued: 2020—100 shares; 2019—100 shares | 1 | 1 | ||||||
Additional paid-in capital | — | — | ||||||
Due from shareholder | (1 | ) | (1) | |||||
Retained earnings | — | — | ||||||
Accumulated other comprehensive income/(loss) | — | — | ||||||
Total Upjohn Inc. shareholder’s equity | — | — | ||||||
Total liabilities and equity | $ | — | $ | — | ||||
(In millions) | Developed Markets | Greater China | JANZ | Emerging Markets | Total | ||||||||||||||||||||||||
Balance at December 31, 2021: | |||||||||||||||||||||||||||||
Goodwill | $ | 9,108.4 | $ | 969.5 | $ | 776.3 | $ | 1,644.5 | $ | 12,498.7 | |||||||||||||||||||
Accumulated impairment losses | (385.0) | — | — | — | (385.0) | ||||||||||||||||||||||||
8,723.4 | 969.5 | 776.3 | 1,644.5 | 12,113.7 | |||||||||||||||||||||||||
Reclassification to assets held for sale | (762.0) | (3.0) | (37.0) | (151.0) | (953.0) | ||||||||||||||||||||||||
Foreign currency translation | (172.2) | 0.7 | (0.4) | (10.0) | (181.9) | ||||||||||||||||||||||||
$ | 7,789.2 | $ | 967.2 | $ | 738.9 | $ | 1,483.5 | $ | 10,978.8 | ||||||||||||||||||||
Balance at March 31, 2022: | |||||||||||||||||||||||||||||
Goodwill | $ | 8,174.2 | $ | 967.2 | $ | 738.9 | $ | 1,483.5 | $ | 11,363.8 | |||||||||||||||||||
Accumulated impairment losses | (385.0) | — | — | — | (385.0) | ||||||||||||||||||||||||
$ | 7,789.2 | $ | 967.2 | $ | 738.9 | $ | 1,483.5 | $ | 10,978.8 |
Common Stock | ||||||||||||||||||||||||||||
(actual dollars and shares) | Shares | Par Value | Add’l Paid-In Capital | Due from Share-holder | Retained Earnings | Accum. Other Comp. Income/(Loss) | Upjohn Inc. Share - holder’s Equity | |||||||||||||||||||||
Balance, January 1, 2020 | 100 | $ | 1 | $ | — | $ | (1 | ) | $ | — | $ | — | $ | — | ||||||||||||||
Net income | — | — | ||||||||||||||||||||||||||
Other comprehensive income/(loss), net of tax | — | — | ||||||||||||||||||||||||||
Balance, March 29, 2020 | 100 | $ | 1 | $ | — | $ | (1 | ) | $ | — | $ | — | $ | — | ||||||||||||||
Common Stock | ||||||||||||||||||||||||||||
(actual dollars and shares) | Shares | Par Value | Add’l Paid-In Capital | Due from Share-holder | Retained Earnings | Accum. Other Comp. Income/(Loss) | Upjohn Inc. Share - holder’s Equity | |||||||||||||||||||||
Initial capitalization, February 14, 2019 (date of incorporation) | 100 | $ | 1 | $ | — | $ | (1 | ) | $ | — | $ | — | $ | — | ||||||||||||||
Net income | — | — | ||||||||||||||||||||||||||
Other comprehensive income/(loss), net of tax | — | — | ||||||||||||||||||||||||||
Balance, March 31, 2019 | 100 | $ | 1 | $ | — | $ | (1 | ) | $ | — | $ | — | $ | — | ||||||||||||||
(In millions) | Weighted Average Life (Years) | Original Cost | Accumulated Amortization | Net Book Value | |||||||||||||||||||
March 31, 2022 | |||||||||||||||||||||||
Product rights, licenses and other (1) | 15 | $ | 38,550.7 | $ | 13,344.6 | $ | 25,206.1 | ||||||||||||||||
In-process research and development | 45.7 | — | 45.7 | ||||||||||||||||||||
$ | 38,596.4 | $ | 13,344.6 | $ | 25,251.8 | ||||||||||||||||||
December 31, 2021 | |||||||||||||||||||||||
Product rights, licenses and other (1) | 15 | $ | 39,006.2 | $ | 12,918.5 | $ | 26,087.7 | ||||||||||||||||
In-process research and development | 46.5 | — | 46.5 | ||||||||||||||||||||
$ | 39,052.7 | $ | 12,918.5 | $ | 26,134.2 |
Three Months Ended | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
(In millions) | 2022 | 2021 | |||||||||||||||||||||
Intangible asset amortization expense | $ | 648.1 | $ | 684.4 | |||||||||||||||||||
Intangible asset impairment charges | — | 83.4 | |||||||||||||||||||||
Total intangible asset amortization expense (including impairment charges) | $ | 648.1 | $ | 767.8 |
(In millions) | |||||
2022 | $ | 1,916 | |||
2023 | 2,392 | ||||
2024 | 2,295 | ||||
2025 | 2,198 | ||||
2026 | 2,141 |
Notional Amount Designated as a Net Investment Hedge | ||||||||||||||||||||
(In millions) | Principal Amount | March 31, 2022 | December 31, 2021 | |||||||||||||||||
2.250% Euro Senior Notes due 2024 | € | 1,000.0 | € | 1,000.0 | € | 1,000.0 | ||||||||||||||
3.125% Euro Senior Notes due 2028 | 750.0 | 750.0 | 750.0 | |||||||||||||||||
2.125% Euro Senior Notes due 2025 | 500.0 | 500.0 | 500.0 | |||||||||||||||||
0.816% Euro Senior Notes due 2022 | 750.0 | 750.0 | 750.0 | |||||||||||||||||
1.023% Euro Senior Notes due 2024 | 750.0 | 750.0 | 750.0 | |||||||||||||||||
1.362% Euro Senior Notes due 2027 | 850.0 | 850.0 | 850.0 | |||||||||||||||||
1.908% Euro Senior Notes due 2032 | 1,250.0 | 1,250.0 | 1,250.0 | |||||||||||||||||
Total | € | 5,850.0 | € | 5,850.0 | € | 5,850.0 | ||||||||||||||
Yen | ||||||||||||||||||||
YEN Term Loan | ¥ | 40,000.0 | ¥ | 40,000.0 | ¥ | 40,000.0 | ||||||||||||||
Yen Total | ¥ | 40,000.0 | ¥ | 40,000.0 | ¥ | 40,000.0 |
Asset Derivatives | Liability Derivatives | ||||||||||||||||||||||
(In millions) | Balance Sheet Location | March 31, 2022 Fair Value | December 31, 2021 Fair Value | Balance Sheet Location | March 31, 2022 Fair Value | December 31, 2021 Fair Value | |||||||||||||||||
Derivatives designated as hedges: | |||||||||||||||||||||||
Foreign currency forward contracts | Prepaid expenses & other current assets | $ | 63.9 | $ | 62.0 | Other current liabilities | $ | 7.6 | $ | 4.3 | |||||||||||||
Total derivatives designated as hedges | 63.9 | 62.0 | 7.6 | 4.3 | |||||||||||||||||||
Derivatives not designated as hedges: | |||||||||||||||||||||||
Foreign currency forward contracts | Prepaid expenses & other current assets | 138.9 | 82.6 | Other current liabilities | 91.3 | 56.7 | |||||||||||||||||
Total derivatives not designated as hedges | 138.9 | 82.6 | 91.3 | 56.7 | |||||||||||||||||||
Total derivatives | $ | 202.8 | $ | 144.6 | $ | 98.9 | $ | 61.0 |
Amount of Gains/(Losses) Recognized in Earnings | Amount of Gains/(Losses) Recognized in AOCE (Net of Tax) on Derivatives | Amount of Gains/(Losses) Reclassified from AOCE into Earnings | |||||||||||||||||||||
Three months ended March 31, | Three months ended March 31, | Three months ended March 31, | |||||||||||||||||||||
(In millions) | Location of Gain/(Loss) | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||
Derivative Financial Instruments in Cash Flow Hedging Relationships (1) : | |||||||||||||||||||||||
Foreign currency forward contracts | Net sales (3) | $ | — | $ | — | $ | 9.7 | $ | 5.6 | $ | 14.2 | $ | 6.1 | ||||||||||
Interest rate swaps | Interest expense (3) | — | — | (0.9) | (0.8) | (1.1) | (1.1) | ||||||||||||||||
Derivative Financial Instruments in Net Investment Hedging Relationships: | |||||||||||||||||||||||
Foreign currency borrowings and forward contracts | — | — | 156.3 | 258.6 | — | — | |||||||||||||||||
Derivative Financial Instruments Not Designated as Hedging Instruments: | |||||||||||||||||||||||
Foreign currency option and forward contracts | Other expense, net (2) | 21.7 | 35.6 | — | — | — | — | ||||||||||||||||
Total | $ | 21.7 | $ | 35.6 | $ | 165.1 | $ | 263.4 | $ | 13.1 | $ | 5.0 |
March 31, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||
(In millions) | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||||
Recurring fair value measurements | |||||||||||||||||||||||||||||||||||
Financial Assets | |||||||||||||||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||||||||||||||
Money market funds | $ | 0.4 | $ | — | $ | — | $ | 50.9 | $ | — | $ | — | |||||||||||||||||||||||
Total cash equivalents | 0.4 | — | — | 50.9 | — | — | |||||||||||||||||||||||||||||
Equity securities: | |||||||||||||||||||||||||||||||||||
Exchange traded funds | 47.3 | — | — | 50.3 | — | — | |||||||||||||||||||||||||||||
Marketable securities | 0.7 | — | — | 0.7 | — | — | |||||||||||||||||||||||||||||
Total equity securities | 48.0 | — | — | 51.0 | — | — | |||||||||||||||||||||||||||||
Available-for-sale fixed income investments: | |||||||||||||||||||||||||||||||||||
Corporate bonds | — | 15.9 | — | — | 16.6 | — | |||||||||||||||||||||||||||||
U.S. Treasuries | — | 13.6 | — | — | 14.6 | — | |||||||||||||||||||||||||||||
Agency mortgage-backed securities | — | 2.5 | — | — | 2.0 | — | |||||||||||||||||||||||||||||
Asset backed securities | — | 4.1 | — | — | 4.6 | — | |||||||||||||||||||||||||||||
Other | — | 0.5 | — | — | 0.4 | — | |||||||||||||||||||||||||||||
Total available-for-sale fixed income investments | — | 36.6 | — | — | 38.2 | — | |||||||||||||||||||||||||||||
Foreign exchange derivative assets | — | 202.8 | — | — | 144.6 | — | |||||||||||||||||||||||||||||
Total assets at recurring fair value measurement | $ | 48.4 | $ | 239.4 | $ | — | $ | 101.9 | $ | 182.8 | $ | — | |||||||||||||||||||||||
Financial Liabilities | |||||||||||||||||||||||||||||||||||
Foreign exchange derivative liabilities | — | 98.9 | — | — | 61.0 | — | |||||||||||||||||||||||||||||
Contingent consideration | — | — | 198.4 | — | — | 199.7 | |||||||||||||||||||||||||||||
Total liabilities at recurring fair value measurement | $ | — | $ | 98.9 | $ | 198.4 | $ | — | $ | 61.0 | $ | 199.7 |
(In millions) | Current Portion (1) | Long-Term Portion (2) | Total Contingent Consideration | ||||||||||||||
Balance at December 31, 2021 | $ | 66.7 | $ | 133.0 | $ | 199.7 | |||||||||||
Payments | (15.5) | — | (15.5) | ||||||||||||||
Reclassifications | 35.0 | (35.0) | — | ||||||||||||||
Accretion | — | 1.9 | 1.9 | ||||||||||||||
Fair value loss (3) | — | 12.3 | 12.3 | ||||||||||||||
Balance at March 31, 2022 | $ | 86.2 | $ | 112.2 | $ | 198.4 |
(In millions) | March 31, 2022 | December 31, 2021 | |||||||||
Commercial paper notes | $ | 328.5 | $ | 1,173.4 | |||||||
Receivables Facility | 325.5 | 318.5 | |||||||||
Other | 1.4 | 1.1 | |||||||||
Short-term borrowings | $ | 655.4 | $ | 1,493.0 |
($ in millions) | Interest Rate as of March 31, 2022 | March 31, 2022 | December 31, 2021 | ||||||||||||||
Current portion of long-term debt: | |||||||||||||||||
2022 Euro Senior Notes **** | 0.816 | % | $ | 831.8 | $ | 856.6 | |||||||||||
2022 Senior Notes *** | 1.125 | % | 1,001.4 | 1,002.9 | |||||||||||||
2023 Senior Notes (a) * | 3.125 | % | 762.2 | — | |||||||||||||
Other | 0.9 | 0.9 | |||||||||||||||
Deferred financing fees | (0.9) | (0.1) | |||||||||||||||
Current portion of long-term debt | $ | 2,595.4 | $ | 1,860.3 | |||||||||||||
Non-current portion of long-term debt: | |||||||||||||||||
2023 Senior Notes (a) * | 3.125 | % | — | 766.1 | |||||||||||||
2023 Senior Notes * | 4.200 | % | 499.6 | 499.6 | |||||||||||||
2024 Euro Senior Notes ** | 2.250 | % | 1,105.7 | 1,135.8 | |||||||||||||
2024 Euro Senior Notes **** | 1.023 | % | 846.5 | 871.6 | |||||||||||||
2025 Euro Senior Notes * | 2.125 | % | 552.7 | 567.8 | |||||||||||||
2025 Senior Notes *** | 1.650 | % | 762.4 | 763.4 | |||||||||||||
2026 Senior Notes ** | 3.950 | % | 2,241.9 | 2,241.4 | |||||||||||||
2027 Euro Senior Notes **** | 1.362 | % | 984.0 | 1,013.0 | |||||||||||||
2027 Senior Notes *** | 2.300 | % | 779.4 | 780.8 | |||||||||||||
2028 Euro Senior Notes ** | 3.125 | % | 825.0 | 847.4 | |||||||||||||
2028 Senior Notes * | 4.550 | % | 748.8 | 748.7 | |||||||||||||
2030 Senior Notes *** | 2.700 | % | 1,518.6 | 1,520.5 | |||||||||||||
2032 Euro Senior Notes **** | 1.908 | % | 1,502.8 | 1,546.6 | |||||||||||||
2040 Senior Notes *** | 3.850 | % | 1,655.4 | 1,657.1 | |||||||||||||
2043 Senior Notes * | 5.400 | % | 497.3 | 497.3 | |||||||||||||
2046 Senior Notes ** | 5.250 | % | 999.9 | 999.9 | |||||||||||||
2048 Senior Notes * | 5.200 | % | 747.8 | 747.8 | |||||||||||||
2050 Senior Notes *** | 4.000 | % | 2,204.0 | 2,205.1 | |||||||||||||
YEN Term Loan Facility | 328.7 | 347.6 | |||||||||||||||
Other | 1.9 | 1.9 | |||||||||||||||
Deferred financing fees | (39.9) | (42.3) | |||||||||||||||
Long-term debt | $ | 18,762.5 | $ | 19,717.1 |
(In millions) | Total | ||||
2022 | $ | 1,830 | |||
2023 | 1,250 | ||||
2024 | 1,937 | ||||
2025 | 1,303 | ||||
2026 | 2,579 | ||||
Thereafter | 11,854 | ||||
Total | $ | 20,753 |
(In millions) | March 31, 2022 | December 31, 2021 | |||||||||
Accumulated other comprehensive loss: | |||||||||||
Net unrealized gain on marketable securities, net of tax | $ | (1.3) | $ | — | |||||||
Net unrecognized loss and prior service cost related to defined benefit plans, net of tax | 29.4 | 32.2 | |||||||||
Net unrecognized loss on derivatives in cash flow hedging relationships, net of tax | 9.4 | 9.2 | |||||||||
Net unrecognized loss on derivatives in net investment hedging relationships, net of tax | 173.1 | 16.7 | |||||||||
Foreign currency translation adjustment | (2,271.6) | (1,802.4) | |||||||||
$ | (2,061.0) | $ | (1,744.3) |
Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
Gains and Losses on Derivatives in Cash Flow Hedging Relationships | Gains and Losses on Net Investment Hedges | Gains and Losses on Marketable Securities | Defined Pension Plan Items | Foreign Currency Translation Adjustment | Totals | ||||||||||||||||||||||||||||||||||||||||||
(In millions) | Foreign Currency Forward Contracts | Interest Rate Swaps | Total | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021, net of tax | $ | 9.2 | $ | 16.7 | $ | — | $ | 32.2 | $ | (1,802.4) | $ | (1,744.3) | |||||||||||||||||||||||||||||||||||
Other comprehensive earnings (loss) before reclassifications, before tax | 13.3 | 201.3 | (1.7) | (2.7) | (469.2) | (259.0) | |||||||||||||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive (loss) earnings, before tax: | |||||||||||||||||||||||||||||||||||||||||||||||
Gain on foreign exchange forward contracts classified as cash flow hedges, included in net sales | (14.2) | (14.2) | (14.2) | ||||||||||||||||||||||||||||||||||||||||||||
Loss on interest rate swaps classified as cash flow hedges, included in interest expense | 1.1 | 1.1 | 1.1 | ||||||||||||||||||||||||||||||||||||||||||||
Amortization of prior service costs included in SG&A | 0.1 | 0.1 | |||||||||||||||||||||||||||||||||||||||||||||
Net other comprehensive earnings (loss), before tax | 0.2 | 201.3 | (1.7) | (2.6) | (469.2) | (272.0) | |||||||||||||||||||||||||||||||||||||||||
Income tax provision (benefit) | — | 44.9 | (0.4) | 0.2 | — | 44.7 | |||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022, net of tax | $ | 9.4 | $ | 173.1 | $ | (1.3) | $ | 29.4 | $ | (2,271.6) | $ | (2,061.0) |
Three Months Ended March 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
Gains and Losses on Derivatives in Cash Flow Hedging Relationships | Gains and Losses on Net Investment Hedges | Gains and Losses on Marketable Securities | Defined Pension Plan Items | Foreign Currency Translation Adjustment | Totals | ||||||||||||||||||||||||||||||||||||||||||
(In millions) | Foreign Currency Forward Contracts | Interest Rate Swaps | Total | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020, net of tax | $ | (18.0) | $ | (353.6) | $ | 1.2 | $ | (26.1) | $ | (461.5) | $ | (858.0) | |||||||||||||||||||||||||||||||||||
Other comprehensive earnings (loss) before reclassifications, before tax | 8.3 | 227.4 | (0.9) | 0.6 | (721.2) | (485.8) | |||||||||||||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive (loss) earnings, before tax: | |||||||||||||||||||||||||||||||||||||||||||||||
Gain on foreign exchange forward contracts classified as cash flow hedges, included in net sales | (6.1) | (6.1) | (6.1) | ||||||||||||||||||||||||||||||||||||||||||||
Loss on interest rate swaps classified as cash flow hedges, included in interest expense | 1.1 | 1.1 | 1.1 | ||||||||||||||||||||||||||||||||||||||||||||
Amortization of prior service costs included in SG&A | (0.1) | (0.1) | |||||||||||||||||||||||||||||||||||||||||||||
Amortization of actuarial gain included in SG&A | 0.3 | 0.3 | |||||||||||||||||||||||||||||||||||||||||||||
Net other comprehensive earnings (loss), before tax | 3.3 | 227.4 | (0.9) | 0.8 | (721.2) | (490.6) | |||||||||||||||||||||||||||||||||||||||||
Income tax provision | 0.8 | 35.1 | 0.1 | 1.0 | — | 37.0 | |||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2021, net of tax | $ | (15.5) | $ | (161.3) | $ | 0.2 | $ | (26.3) | $ | (1,182.7) | $ | (1,385.6) |
Net Sales | Segment Profitability | |||||||||||||||||||||||||
Three Months Ended March 31, | Three Months Ended March 31, | |||||||||||||||||||||||||
(In millions) | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Reportable Segments: | ||||||||||||||||||||||||||
Developed Markets | $ | 2,476.1 | $ | 2,571.6 | $ | 1,211.5 | $ | 1,285.4 | ||||||||||||||||||
Greater China | 573.1 | 591.9 | 417.7 | 404.9 | ||||||||||||||||||||||
JANZ | 423.8 | 481.9 | 174.3 | 184.2 | ||||||||||||||||||||||
Emerging Markets | 705.2 | 754.7 | 345.3 | 337.3 | ||||||||||||||||||||||
Total reportable segments | $ | 4,178.2 | $ | 4,400.1 | $ | 2,148.8 | $ | 2,211.8 | ||||||||||||||||||
Reconciling items: | ||||||||||||||||||||||||||
Intangible asset amortization expense | (648.1) | (684.4) | ||||||||||||||||||||||||
Intangible asset impairment charges | — | (83.4) | ||||||||||||||||||||||||
Globally managed research and development costs | (142.3) | (184.1) | ||||||||||||||||||||||||
Litigation settlements & other contingencies | (6.2) | (22.9) | ||||||||||||||||||||||||
Transaction related and other special items | (185.6) | (993.4) | ||||||||||||||||||||||||
Corporate and other unallocated | (459.2) | (509.8) | ||||||||||||||||||||||||
Earnings (loss) from operations | $ | 707.4 | $ | (266.2) |
(In millions) | Employee Related Costs | Other Exit Costs | Total | ||||||||||||||
Balance at December 31, 2021: | $ | 292.6 | $ | 4.1 | $ | 296.7 | |||||||||||
Charges (1) | 7.3 | 9.5 | 16.8 | ||||||||||||||
Cash payment | (77.6) | (6.2) | (83.8) | ||||||||||||||
Utilization | — | (4.2) | (4.2) | ||||||||||||||
Foreign currency translation | (2.1) | (0.1) | (2.2) | ||||||||||||||
Balance at March 31, 2022: | $ | 220.2 | $ | 3.1 | $ | 223.3 | |||||||||||
Three Months Ended | |||||||||||||||||||||||
March 31, | |||||||||||||||||||||||
(In millions, except per share amounts and %s) | 2022 | 2021 | Change | % Change | |||||||||||||||||||
Total revenues | $ | 4,191.7 | $ | 4,430.3 | $ | (238.6) | (5) | % | |||||||||||||||
Gross profit | 1,771.2 | 1,127.3 | 643.9 | 57 | % | ||||||||||||||||||
Earnings (loss) from operations | 707.4 | (266.2) | 973.6 | nm | |||||||||||||||||||
Net earnings (loss) | 399.2 | (1,037.6) | 1,436.8 | nm | |||||||||||||||||||
Diluted earnings (loss) per share | $ | 0.33 | $ | (0.86) | $ | 1.19 | nm |
Three Months Ended | |||||||||||||||||||||||||||||||||||
March 31, | |||||||||||||||||||||||||||||||||||
(In millions, except %s) | 2022 | 2021 | % Change | 2022 Currency Impact (1) | 2022 Constant Currency Revenues | Constant Currency % Change (2) | |||||||||||||||||||||||||||||
Net sales | |||||||||||||||||||||||||||||||||||
Developed Markets | $ | 2,476.1 | $ | 2,571.6 | (4) | % | $ | 89.1 | $ | 2,565.2 | — | % | |||||||||||||||||||||||
Greater China | 573.1 | 591.9 | (3) | % | (8.1) | 565.0 | (5) | % | |||||||||||||||||||||||||||
JANZ | 423.8 | 481.9 | (12) | % | 37.8 | 461.6 | (4) | % | |||||||||||||||||||||||||||
Emerging Markets | 705.2 | 754.7 | (7) | % | 51.5 | 756.6 | — | % | |||||||||||||||||||||||||||
Total net sales | $ | 4,178.2 | $ | 4,400.1 | (5) | % | $ | 170.3 | $ | 4,348.4 | (1) | % | |||||||||||||||||||||||
Other revenues (3) | 13.5 | 30.2 | nm | 0.5 | 14.0 | nm | |||||||||||||||||||||||||||||
Consolidated total revenues (4) | $ | 4,191.7 | $ | 4,430.3 | (5) | % | $ | 170.8 | $ | 4,362.4 | (1) | % |
Three Months Ended | |||||||||||
March 31, | |||||||||||
(In millions, except %s) | 2022 | 2021 | |||||||||
U.S. GAAP cost of sales | $ | 2,420.5 | $ | 3,303.0 | |||||||
Deduct: | |||||||||||
Purchase accounting related amortization | (658.8) | (1,255.0) | |||||||||
Acquisition related items | (9.0) | (2.5) | |||||||||
Restructuring related costs | (13.1) | (167.8) | |||||||||
Share-based compensation expense | (0.3) | (0.6) | |||||||||
Other special items | (41.0) | (86.7) | |||||||||
Adjusted cost of sales | $ | 1,698.3 | $ | 1,790.4 | |||||||
Adjusted gross profit (a) | $ | 2,493.4 | $ | 2,639.9 | |||||||
Adjusted gross margin (a) | 59 | % | 60 | % |
Three Months Ended | |||||||||||
March 31, | |||||||||||
(In millions) | 2022 | 2021 | |||||||||
Contingent consideration adjustment (primarily related to respiratory delivery platform) | $ | 12.4 | $ | 9.1 | |||||||
Litigation settlements, net | (6.2) | 13.8 | |||||||||
Total litigation settlements and other contingencies, net | $ | 6.2 | $ | 22.9 |
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
(In millions) | 2022 | 2021 | |||||||||||||||||||||||||||||||||
U.S. GAAP net earnings (loss) | $ | 399.2 | $ | (1,037.6) | |||||||||||||||||||||||||||||||
Purchase accounting related amortization (primarily included in cost of sales) | 658.9 | 1,255.0 | |||||||||||||||||||||||||||||||||
Litigation settlements and other contingencies, net | 6.2 | 22.9 | |||||||||||||||||||||||||||||||||
Interest expense (primarily amortization of premiums and discounts on long term debt) | (13.7) | (13.3) | |||||||||||||||||||||||||||||||||
Clean energy investments pre-tax (gain) loss | (0.1) | 17.9 | |||||||||||||||||||||||||||||||||
Acquisition related costs (primarily included in SG&A) (a) | 84.7 | 59.8 | |||||||||||||||||||||||||||||||||
Restructuring related costs (b) | 16.8 | 315.4 | |||||||||||||||||||||||||||||||||
Share-based compensation expense | 28.3 | 32.7 | |||||||||||||||||||||||||||||||||
Other special items included in: | |||||||||||||||||||||||||||||||||||
Cost of sales (c) | 41.0 | 86.7 | |||||||||||||||||||||||||||||||||
Research and development expense | 0.3 | 14.7 | |||||||||||||||||||||||||||||||||
Selling, general and administrative expense | 7.4 | 19.3 | |||||||||||||||||||||||||||||||||
Other expense, net | (1.5) | — | |||||||||||||||||||||||||||||||||
Tax effect of the above items and other income tax related items (d) | (102.2) | 342.9 | |||||||||||||||||||||||||||||||||
Adjusted net earnings | $ | 1,125.3 | $ | 1,116.4 | |||||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||
(In millions) | 2022 | 2021 | |||||||||
U.S. GAAP net earnings (loss) | $ | 399.2 | $ | (1,037.6) | |||||||
Add / (deduct) adjustments: | |||||||||||
Net contribution attributable to equity method investments | (0.1) | 17.9 | |||||||||
Income tax provision | 128.3 | 596.3 | |||||||||
Interest expense (a) | 146.2 | 169.0 | |||||||||
Depreciation and amortization (b) | 736.0 | 1,422.5 | |||||||||
EBITDA | $ | 1,409.6 | $ | 1,168.1 | |||||||
Add adjustments: | |||||||||||
Share-based compensation expense | 28.3 | 32.7 | |||||||||
Litigation settlements and other contingencies, net | 6.2 | 22.9 | |||||||||
Restructuring, acquisition related and other special items (c) | 142.2 | 412.9 | |||||||||
Adjusted EBITDA | $ | 1,586.3 | $ | 1,636.6 |
Combined Summarized Balance Sheet Information of Viatris Inc., Mylan Inc., Utah Acquisition Sub Inc. and Mylan II B.V. | |||||||||||
(In millions) | March 31, 2022 | December 31, 2021 | |||||||||
ASSETS | |||||||||||
Current assets | $ | 339.9 | $ | 280.2 | |||||||
Non-current assets | 60,622.5 | 60,298.0 | |||||||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities | 24,889.7 | 23,619.9 | |||||||||
Non-current liabilities | 15,625.0 | 16,465.6 |
Combined Summarized Income Statement Information of Viatris Inc., Mylan Inc., Utah Acquisition Sub Inc. and Mylan II B.V. | |||||||||||
(In millions) | Three Months Ended March 31, 2022 | Year Ended December 31, 2021 | |||||||||
Revenues | $ | — | $ | — | |||||||
Gross profit | — | — | |||||||||
Loss from operations | (215.1) | (1,023.9) | |||||||||
Net earnings (loss) | 399.2 | (1,269.1) |
ITEM 6. EXHIBITS | ||||||||
incorporated herein by reference.* | ||||||||
List of subsidiary guarantors and issuers of guaranteed securities, filed as Exhibit 22 to the Form 10-K for the fiscal year ended December 31, 2021, and incorporated herein by reference. | ||||||||
101.INS | ||||||||
Inline XBRL Instance Document | ||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | |||||||
101.DEF | ||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | |||||||
104 | ||||||||
Cover Page Interactive Data | ||||||||
* | Annexes, schedules and/or exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Viatris agrees to furnish supplementally a copy of any omitted attachment to the SEC on a confidential basis upon request. | |||||||
Viatris Inc. | ||||||||||||
By: | ||||||||||||
/s/ MICHAEL GOETTLER | ||||||||||||
Michael Goettler | ||||||||||||
Chief Executive Officer | ||||||||||||
(Principal Executive Officer) |
/s/ SANJEEV NARULA | ||||||||
Sanjeev Narula | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial Officer) |